If the current oil price spike has you frightened and of the belief that the U.S. economy could be crippled by the sharp rise, take a look at these two charts from Citi.
Steven Wieting of Citi argues that, unless North Africa and the Middle East takes another drastic turn, there is no reason for crude prices to go higher. And with U.S. supplies as high as they are, we may even escape this completely unharmed, though the summer driving season will be the real test.
With that in mind, take a look at this chart of the last employment recession from Citi. The spike didn’t result in an economic downturn, it followed it, suggesting the causal relationship between WTI and the economy is not perfect.
Second, note the extremely high inventory of crude in the U.S. right now. They’re significantly higher than when the oil price spiked in 2008, and suggest that should this crisis in the Middle East abate before the summer, there won’t be a significant impact on the U.S. consumer during the all important driving season.